PROJECT NO. 38338
RULEMAKING RELATING TO THE
ACCOUNTABILITY AND
PERFORMANCE OF THE ELECTRIC
RELIABILITY COUNCIL OF TEXAS
§
§
§
§
PUBLIC UTILITY COMMISSION
OF TEXAS
PROPOSAL FOR PUBLICATION OF AMENDMENTS TO §§25.361, 25.362 AND 25.363
AS APPROVED AT THE AUGUST 19, 2010 OPEN MEETING
The Public Utility Commission of Texas (commission) proposes amendments to §25.361,
relating to the Electric Reliability Council of Texas, §25.362, relating to Electric Reliability
Council of Texas Governance, and §25.363, relating to Electric Reliability Council of Texas
Fees and Other Rates. The proposed amendments will make the Electric Reliability Council of
Texas more accountable to the commission and introduce additional controls over the budget and
fees of this organization. These rules are competition rules subject to judicial review as specified
in PURA §39.001(e). Project Number 38338 is assigned to this proceeding.
Jess Totten, Competitive Markets Division, has determined that for each year of the first fiveyear period the proposed sections are in effect there will be no fiscal implications for state or
local government as a result of enforcing or administering the section.
Mr. Totten has determined that for each year of the first five years the proposed sections are in
effect the public benefit anticipated as a result of enforcing the section will be greater
accountability and cost control with respect to the Electric Reliability Council of Texas
(ERCOT), which plays a critical role in the efficient operation of the electricity grid in most of
Texas. There will be no adverse economic effect on small businesses or micro-businesses as a
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result of enforcing this section. Therefore, no regulatory flexibility analysis is required. There is
no anticipated economic cost to persons who are required to comply with the section as
proposed. There may be economic costs to persons who are required to comply with the
proposed section. These costs implementing management, governance, and budgeting changes
by ERCOT, but the rules are also anticipated to require ERCOT to exercise greater scrutiny over
its costs and seek and implement operational improvements. Accordingly, it is believed that the
benefits accruing from implementation of the proposed section will outweigh these costs.
Mr. Totten has also determined that for each year of the first five years the proposed sections are
in effect there should be no effect on a local economy, and therefore no local employment impact
statement is required under Administrative Procedure Act (APA), Texas Government Code
§2001.022.
The commission staff will conduct a public hearing on this rulemaking, if requested pursuant to
the Administrative Procedure Act, Texas Government Code §2001.029, at the commission’s
offices located in the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas
78701 on Wednesday, November 3, 2010. The request for a public hearing must be received
within 31 days after publication.
Comments on the proposed amendments may be submitted to the Filing Clerk, Public Utility
Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 787113326, within 31 days after publication. Sixteen copies of comments to the proposed amendments
are required to be filed pursuant to §22.71(c) of this title. Reply comments may be submitted
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within 45 days after publication. Comments should be organized in a manner consistent with the
organization of the proposed rule(s). The commission invites specific comments regarding the
costs associated with, and benefits that will be gained by, implementation of the proposed
section. The commission will consider the costs and benefits in deciding whether to adopt the
section. All comments should refer to Project Number 38338. In addition to the comments on
the proposed rules and the costs of the rules, if adopted, the commission invites comments on the
following question:
The Texas Sunset Commission has recommended a change in the way the ERCOT
administrative fee is set, so that the fee would be designed to collect the amount of the approved
budget, rather than the amount generated by a fixed fee. Would it be appropriate for the
commission to adopt such a change in connection with the adoption of the rules proposed in this
Order?
These amendments are proposed under the Public Utility Regulatory Act, Texas Utilities Code
Annotated §14.002, which provides the Public Utility Commission with the authority to make
and enforce rules reasonably required in the exercise of its powers and jurisdiction, and
specifically, PURA §39.151, which grants the commission the authority to adopt and enforce
rules relating to the reliability of the regional electric network and accounting for the production
and delivery of electricity among market participants, provides that an independent organization
is directly responsible and accountable to the commission, provides that the commission has
complete authority to oversee and investigate the organization’s finances, budget, and operations
as necessary to ensure the organization’s accountability and to ensure that it adequately performs
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its functions and duties, require an independent organization to provide reports and information
relating to the independent organization's performance of its functions and relating to the
organization's revenues, expenses, and other financial matters. In addition, this section permits
the commission to prescribe a system of accounts for an independent organization; conduct
audits of an independent organization relating to the performance of its functions or its revenues,
expenses, and other financial matters and may require an independent organization to conduct
such an audit; inspect an independent organization's facilities, records, and accounts; assess
administrative penalties against an independent organization. This section also authorizes the
commission to approve and charge a reasonable and competitively neutral rate to cover the
independent organization's costs.
This section directs the commission to investigate the
organization's cost efficiencies, salaries and benefits, and use of debt financing and permits it to
require an independent organization to provide any information needed to effectively evaluate
the organization's budget and the reasonableness and neutrality of a rate or proposed rate or the
effectiveness or efficiency of the organization.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.002, 39.151.
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§25.361. Electric Reliability Council of Texas (ERCOT).
(a)
Applicability.
This section applies to the Electric Reliability Council of Texas
(ERCOT). It also applies to transmission service providers (TSPs) and transmission
service customers, as defined in §25.5 of this title (relating to Definitions), with respect to
interactions with ERCOT. For the purpose of this section and §25.362 of this title
(relating to Electric Reliability Council of Texas (ERCOT) Governance) an ERCOT rule
is a protocol, operating guide, market guide, or other procedures that constitutes a
statement of general policy and that has an impact on the governance of the organization
or on reliability, settlement, customer registration, or access to the transmission system in
the ERCOT region.
(b)
FunctionsPurpose. ERCOT shall perform the functions of an independent organization
under the Public Utility Regulatory Act (PURA) §39.151 to ensure access to the
transmission and distribution systems for all buyers and sellers of electricity on
nondiscriminatory terms; ensure the reliability and adequacy of the regional electrical
network; ensure that information relating to a customer's choice of retail electric provider
is conveyed in a timely manner to the persons who need that information; and ensure that
electricity production and delivery are accurately accounted for among the generators and
wholesale buyers and sellers in the region. ERCOT shall:In addition, ERCOT may, on
the introduction of customer choice in the ERCOT power region, acquire generationrelated ancillary services on a nondiscriminatory basis on behalf of entities selling
electricity at retail in accordance with PURA §35.004(e).
PROJECT NO. 38338
(c)
Functions.
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ERCOT shall operate an integrated electronic transmission information
network and carry out the other functions prescribed by this section. ERCOT shall:
(1)
administer, on a daily basis, the operational and market functions of the ERCOT
system, including acquiring ancillary services, scheduling of resources and loads,
and managing transmission congestionmanagement, as set forth in this title,
commission orders, and the ERCOT rulesprotocols;
(2)
administer settlement and billing for services provided by ERCOT, including
assessing creditworthiness of market participants and establishing and enforcing
reasonable security requirements in relation to their responsibilities in ERCOToperated markets;
(3)
serve as the single point of contact for the initiation of transmission transactions;
(4)
maintain the reliability and security of the ERCOT region's electrical network,
including the instantaneous balancing of ERCOT generation and load and
monitoring the adequacy of resources to meet demand;
(5)
provide fordirect the curtailment and redispatch of ERCOT generation and
transmission transactions on a non-discriminatory access to the transmission
systembasis, consistent with this title, commission orders, and ERCOT
rulesprotocols;
(6)
accept and supervise the processing of all requests for interconnection to the
ERCOT transmission system from owners of new generating facilities;
(7)
coordinate and schedule planned transmission facility outages;
(8)
perform system screening security studies, with the assistance of affected TSPs;
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(9)
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plan the ERCOT transmission system, in accordance with subsection (f) of this
section;
(10)
administer procedures for the registration of market participants;
(11)
develop, manage, and operate the customer registration system;
(12)
administer the renewable energy program, unless the commission designates a
different person to administer the program;
(13)
monitor generation planned outages;
(14)
disseminate information relating to market operations, market prices, and the
availability of services, in accordance with this title, commission orders, and the
ERCOT rulesprotocols;
(15)
operate an electronic transmission information network; and
submit an annual report to the commission identifying existing and potential
transmission and distribution constraints and system needs within ERCOT, with
emphasis on critical transmission projects, alternatives for meeting system needs,
and recommendations for meeting system needs, pursuant to PURA §39.155
(relating to Commission Assessment of Market Power); and
(16)
perform any additional duties required under this title, commission orders, andthe
ERCOT rulesprotocols.
(c)(d) Commercial functions. ERCOT shall dispatch generation facilities only in accordance
with the provisions of this title, commission orders and the ERCOT rulesprotocols. This
responsibility includes authority to redispatch generation resources, in accordance with
§25.200 of this title (relating to Load Shedding, Curtailments, and Redispatch) and the
ERCOT protocols, and to determine and purchase the amount of ancillary services
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required to maintain and ensure the reliability of the network. All commercial functions
required to ensure reliability and adequacy of the transmission network are to be
conducted in accordance with the ERCOT rulesprotocols.
(d)(e) Liability. ERCOT shall not be liable in damages for any act or event that is beyond its
control and which could not be reasonably anticipated and prevented through the use of
reasonable measures, including, but not limited to, an act of God, act of the public enemy,
war, insurrection, riot, fire, explosion, labor disturbance or strike, wildlife, unavoidable
accident, equipment or material shortage, breakdown or accident to machinery or
equipment, or good faith compliance with a then valid curtailment, order, regulation or
restriction imposed by governmental, military, or lawfully established civilian authorities.
(e)(f) Planning.
ERCOT shall conduct transmission system planning and exercise
comprehensive authority over the planning of bulk transmission projects that affect the
transfer capability of the ERCOT transmission system. ERCOT shall supervise and
coordinate the other planning activities of TSPs.
(1)
ERCOT shall evaluate and make a recommendation to the commission as to the
need for any transmission facility over which it has comprehensive transmission
planning authority.
(2)
A TSP shall coordinate its transmission planning efforts with those of other TSPs,
insofar as its transmission plans affect other TSPs.
(3)
ERCOT shall submit to the commission any revisions or additions to the planning
guidelines and procedures prior to adoption. ERCOT may seek input from the
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commission as to the content and implementation of its guidelines and procedures
as it deems necessary.
(f)(g) Information and coordination.
Transmission service providers and transmission
service customers shall provide such information as may be required by ERCOT to carry
out the functions prescribed by this title, commission orders,section and the ERCOT
rulesprotocols.
ERCOT shall maintain the confidentiality of competitively sensitive
information and other protected information, as specified in §25.362 of this title.
Providers of transmission and ancillary services shall also maintain the confidentiality of
competitively sensitive information entrusted to them by ERCOT or a transmission
service customer.
(g)(h) Interconnection standards. In performing its functions related to the reliability and
security of the ERCOT electrical network, ERCOT may prescribe reliability and security
standards for the interconnection of generating facilities that use the ERCOT
transmission network. Such standards shall not adversely affect or impede manufacturing
or other internal process operations associated with such generating facilities, except to
the minimum extent necessary to assure reliability of the ERCOT transmission network.
(h)(i) ERCOT administrative fee.
ERCOT shall charge an administrative fee, and for
transmission service in accordance with ERCOT protocols.
Changes inthe fee or
application of new fees it charges are subject to commission approval, in accordance with
this title.
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(i)(j)
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Reports. Each TSP and transmission service customer in the ERCOT region shall on an
annual basis provide to ERCOT historical information concerning peak loads and
resources connected to the TSP's system.
ERCOT shall periodically file with the
commission reports concerning its governance, operations and budget, the reliability
region of the ERCOT electrical network, and ERCOT's transmission planning efforts,
including a list of any transmission projects that it recommends.
(j)(k) Anti-trust laws. The existence of ERCOT is not intended to affect the application of any
state or federal anti-trust laws.
(k)(l) Decertification. ERCOT shall be subject to decertification as an independent
organization in accordance with §25.364 of this title (relating to Decertification of an
Independent Organization).
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§25.362. Electric Reliability Council of Texas (ERCOT) Governance.
(a)
Purpose. This section provides standards for the governanceoperation of an independent
organization within the ERCOT region.
(b)
(No change.)
(c)
Adoption of rules by ERCOT and commission review. ERCOT shall adopt and
comply with procedures concerning the adoption and revision of protocols and
proceduresERCOT rules that constitute statements of general policy and that have an
impact on the governance of the organization or on reliability, settlement, customer
registration, or access to the transmission system.
(1)
The procedures shall provide for advance notice to interested persons, an
opportunity to file written comments or participate in public discussions, and, in
the case of new ERCOT rulesprotocols or revisions to ERCOT rulesprotocols, an
evaluation by ERCOT of the costs and benefits to the organization and the
operation of electricity markets.
(2)
ERCOT staff, the independent market monitor, and the commission’s reliability
monitor may comment on any proposed change in ERCOT rules that affects the
operation and competitiveness of markets operated by ERCOT or reliability of the
electric network in ERCOT. [The commission shall process requests for review of
ERCOT protocols, procedures, and decisions in accordance with §22.251 of this
title (relating to Review of Electric Reliability Council of Texas (ERCOT)
Conduct).]
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(3)
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If the findings of a commission-mandated audit of ERCOT operations or
governance indicate the need for a change in operating practices or procedures or
governance rules, ERCOT shall develop and submit to the commission a plan for
implementing the changes. ERCOT shall implement the plan, as approved by the
commission.
(4)
The commission may review a provision of ERCOT’s articles of incorporation or
by-laws, or a new or amended ERCOT rule on the application of an interested
person, including commission staff and the Office of Public Utility Counsel.
(5)
If the commission concludes that ERCOT’s articles of incorporation or by-laws,
or a new or amended ERCOT rule is not consistent with law or not conducive to
the efficient and effective management of the organization, reliable operation of
the electrical network, or efficient operation of energy markets, it may order
ERCOT to modify any of these documents.
If the commission orders a
modification of any of these documents, it may establish a date by which such
modifications must be completed.
(6)
The commission shall process requests for review of ERCOT rules and decisions
in accordance with §22.251 of this title (relating to Review of Electric Reliability
Council of Texas (ERCOT) Conduct). A request for review under this subsection
is not subject to the alternative dispute resolution requirements in § 22.251(c) of
this title, and the commission may, for good cause, waive the requirement that a
complaint be filed within the time prescribed in § 22.251(d) of this title.
(d)
Access to meetings. ERCOT shall adopt and comply with procedures for providing
access to its meetings to market participants and the general public. These procedures
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shall include provisions on advance notice of the time, place, and topics to be discussed
during open and closed portions of the meetings, and making and retaining a record of the
meetings. Records of meetings of the governing board of directors shall be retained
permanently, and ERCOT shall establish reasonable retention periods, but not less than
five years, for records of other meetings.
(e)
Access to information. This subsection governs access to information held by ERCOT
and access to information held by the commission that it receives from ERCOT.
(1)
ERCOT shall adopt and comply with procedures that allow persons to request and
obtain access to records that ERCOT has or has access to relating to the
governance and budget of the organization, market operation, reliability,
settlement, customer registration, and access to the transmission system. ERCOT
shall make these procedures publicly available. Information that is available for
public disclosure pursuant to ERCOT procedures shall normally be provided
within ten business days of the receipt of a request for the information. If a
response requires more than ten business days, ERCOT will notify the requester
of the expected delay and the anticipated date that the documents may be
available. ERCOT's procedures regarding access to records shall be consistent
with this title and commission orderssection.
(A)
Information submitted to or collected by ERCOT pursuant to requirements
of ERCOT rulesthe protocols or operating guides shall be protected from
public disclosure only if it is designated as Protected Information pursuant
to ERCOT rules,the Protocols except as otherwise provided in this
subsection.
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(B)
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On its own motion or the petition of an affected party, including
commission staff, the commission may, after providing reasonable notice
to affected parties and an opportunity to be heard, amend the definition of
“Protected Information” or the designation of “Items Not Considered
Protected Information” under the ERCOT rulesProtocols. In considering
such an amendment, the commission may review the specific information
under consideration or a general description of such information.
(C)
The procedures adopted by ERCOT under this subsection shall include
provisions for promptly respondresponding to a request from the
commission, theor commission Executive Director or the Executive
Director’s designeestaff for information that ERCOT collects, creates or
maintains in order to provide the commission access to information that
the commission, the commission Executive Director or the Executive
Director’s designee or commission staff determines is necessary to assess
market power and the development and operation of competitive
wholesale and retail markets; to evaluate possible violations of laws, rules,
protocols, or codes of conduct; or to carry out the commission's
responsibilities for oversight of ERCOT and the wholesale and retail
markets.
(2)
Commission employees, consultants, agents, and attorneys who have access to
Protected Information pursuant to this section shall not disclose such information
except as provided in this subsection and in accordance with the provisions of the
Texas Public Information Act (TPIA).
PROJECT NO. 38338
(A)
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If the commission receives from a member of the Texas Legislature a
request for information that the commission has or has access to that is
designated as “Protected Information” under the ERCOT Protocols, the
commission shall provide the information to the requestor pursuant to the
provisions of Texas Government Code Annotated §552.008. If permitted
by the requesting member of the Texas Legislature the commission shall
notify ERCOT, and, if applicable, the entity that provided the information
to ERCOT, of the existence of the request, the identity of the requestor,
and the substance of the request.
(B)
If the commission receives a request for information that the commission
has or has access to that has been designated as Protected Information
under the Protocols the commission shall make a good faith effort to
provide notice of the request to the affected market participant and
ERCOT within three business days of receipt of the request. If the thirdparty provider of the information objects to the release of the information,
the commission shall offer to facilitate an informal resolution between the
requestor and the third party. If informal resolution of an information
request is not possible, the commission will process the request in
accordance with the TPIA.
(C)
In the absence of a request for information, if the commission staff seeks
to release information that the commission has or has access to that has
been designated as Protected Information under the Protocols, the
commission may determine the validity of the asserted claim of
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confidentiality through a contested-case proceeding. In a contested case
proceeding conducted by the commission pursuant to this subsection, the
staff, the entity that provided the information to the commission, and
ERCOT will have an opportunity to present information or comment to
the commission on whether the information is subject to protection from
disclosure under the TPIA.
(D)
In connection with any challenge to the confidentiality of information
under subparagraph (C) of this paragraph, any person who asserts a claim
of confidentiality with respect to the information must, at a minimum,
state in writing the specific reasons why the information is subject to
protection from public disclosure and provide legal authority in support of
such assertion.
(E)
Except as otherwise provided in subparagraph (A) of this paragraph, if
either the commission or the attorney general determines that the
disclosure of information designated as Protected Information under the
ERCOT Protocols is appropriate, the commission shall provide notice to
the entity that provided the information and to ERCOT at least three
business days prior to the disclosure of the Protected Information (or, in
the case of a valid and enforceable order of a state or federal court of
competent jurisdiction specifically requiring disclosure of Protected
Information earlier than within three business days, prior to such
disclosure).
(f)
(No change.)
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(g)
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Qualifications for and selection of membership onmembers of the governing board.
ERCOT shall establish and implement criteria for an individual to serve as a member of
its governing board, procedures to determine whether an individual meets these criteria,
and procedures for removal of an individual from service if the individual ceases to meet
the criteria.
(1)
The qualification criteria shall include:
(A) - (B)
(C)
(No change.)
Standards of good standing that an organization must meet, in order for a
representative of the organization to serve as a member of the governing
board; and
(D)
Standards of good standing that an individual must meet, in order for the
individual to serve as a member of the governing board.;and
(E)
The disqualification of any person to serve as a member of the governing
board as a director that is not selected by a market sector under ERCOT’s
rules of governance if the person is employed or has within one year been
employed by an entity in the electric sector that is eligible for membership
in ERCOT in a market sector that has a representative on the governing
board, other than a consumer sector.
(2)
The procedures for removal of a member from service on the governing board
shall include:
(A)
(No change.)
(B)
Procedures for the removal of an individual from the governing board if
the individual or the organization that the individual represents no longer
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meets the criteria adopted under paragraph (1) of this subsection or
violates a policy adopted under this section.
(3)
The procedures adopted under paragraph (2) of this subsection shall:
(A)
Permit any interested party to present information that relates to whether
an individual or organization meets the criteria specified in paragraph (1)
of this subsection or has violated a policy adopted under this section; and
(B)
Specify how decisions concerning the qualification of an individual or
whether an individual has violated a policy will be made.
(4)
A decision concerning an individual or organization's qualification or an
individual’s removal from the governing board is subject to review by the
commission.
(5)
ERCOT shall notify the commissioners when a vacancy occurs for a member of
the governing board who is not selected by a market sector under ERCOT’s rules
of governance.
ERCOT shall provide information to the commissioners
concerning the process for selecting a new member, the candidates who have been
identified and their qualifications, any recommendation that will be made to the
governing board, and any other information requested by a commissioner. The
selection of a member of the governing board who is not selected by a market
sector is subject to approval by the commission. A person who is selected may
not serve as a member of the governing board until the commission approves the
selection.
(6)
A member of the governing board of ERCOT appointed after the effective date of
this paragraph who has served as a director that is not selected by a market sector
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under ERCOT’s rules of governance may not represent a market participant
before the governing board of ERCOT, the ERCOT technical advisory committee,
or any of its subcommittees or working groups, for a period of two years after the
person ceases to serve as a director of ERCOT.
(h)
Executive officers and managers. The appointment of the chief executive officer, chief
operating officer, and vice presidents of ERCOT is subject to commission approval.
(i)(h) Required reports and other information. ERCOT shall file with the commission the
reports and provide the information required by this subsection.
(1)
Annual report. Beginning with the 2002 calendar year, ERCOT shall file an
annual report and operations report with the commission, not later than 120 days
after the end of the year. The annual report and operations report shall include:
(A)
A summary of the findings of anAn independent audit of ERCOT's
financial statements for the report year;
(B)
A schedule comparing actual revenues and costs to budgeted revenues and
costs for the report year, and a schedule showing the variance between
actual and budgeted revenues and costs, and a schedule showing the assets
and liabilities (including level and types of debt);
(C)
A summary of the findings of anAnindependent audit of ERCOT's market
operation for the report year;
(D)
The annual board-approved budget; and
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(E)
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A summary of key market operations statistics, including prices and
quantities of energy and capacity purchased in the markets operated by
ERCOT; Any other information the commission may deem necessary.
(F)
A summary of key reliability statistics;
(G)
A summary of transmission planning and generation interconnection
activities and the most recent report on capacity, demand and reserves; and
(H)
(2)
Any other information the commission may deem necessary.
Resources report. ERCOT shall submit a report to the commission no later than
October 1 of each even-numbered year, identifying existing and potential
transmission constraints and the need for additional transmission, generation, or
demand response resources within the ERCOT region. The report shall include
projections of changes in demand, the capability of generation, energy storage,
and demand response resources, projected reserve margins alternatives for
meeting system needs, and recommendations for meeting system needs.
(3)(2) Quarterly reports. ERCOT shall file quarterly reports no later than 45 days after
the end of each quarter, which shall include:
(A)
A summary of any material findings of anyAll internal audit reports that
were produced during the reporting quarter;
(B)
A report on performance measures, as prescribed by the commission;
(C)
By account item as established in the fee-filing package prescribed by the
commission under §22.252 of this title (relating to Procedures for
Approval of ERCOT Fees and Rates) a report of:
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(i)
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ERCOT fees and other rates, funds allocated, funds encumbered,
and funds expended;
(ii)
An explanation for expenditures deviating from the original
funding allocation for the particular account item;
(iii)
For the report covering the fourth quarter of ERCOT's fiscal year,
a detailed explanation of how unexpended funds will be expended
in the subsequent year; and
(D)
(4)(3)
Any other information the commission may deem necessary.
Emergency reports. If ERCOT management becomes aware of any event or
situation that could reasonably be anticipated to adversely affect the reliability of
the regional electric network; the operation or competitiveness of theaccounting
procedures applicable to ERCOT or the ERCOT market; ERCOT’s performance
of activities related to the customer registration function; or the public’s
confidence in the ERCOT market or in ERCOT’s performance of its duties,
ERCOT management shall immediately notify the Executive Director of the
commission, or the Executive Director’s designee, by telephone. Additionally,
ERCOT shall file a written report of the facts involved by the end of the following
business day after becoming aware of such event or situation, unless the
Executive Director specifies, in writing, that the report may be delayed. The
Executive Director may not authorize a delay of more than 30 days for filing the
required written report. For good cause, the commission may grant further delays
in filing the required report. If it determines that additional reports are necessary,
the commission may establish a schedule for the filing of additional reports after
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the initial written report by ERCOT. As a part of any additional written report,
ERCOT may be required to fully explain the facts and to disclose any actions it
has taken, or will take, in order to prevent a recurrence of the events that led to the
need for filing an emergency report.
If ERCOT contends that any of the
information contained in an emergency report is “Protected Information” under
the ERCOT Protocols, or is otherwise subject to protection from disclosure under
the TPIA, the report will be subject to the requirements of subsection (e) of this
section.
(j)(i)
Compliance with rules or orders. ERCOT shall inform the commission with as much
advance notice as is practical if ERCOT realizes that it will not be able to comply with
PURA, the commission's substantive rulesany provision of this title, or a commission
order. If ERCOT fails to comply with PURA, the commission's substantive rulesany
provision of this title, or a commission order, the commission may, after notice and
opportunity for hearing, adopt the measures specified in this subsection or such other
measures as it determines are appropriate.
(1)
The commission may require ERCOT to submit, for commission approval, a
proposal that details the actions ERCOT will undertake to remedy the noncompliance.
(2)
The commission may require ERCOT to begin submitting reports, in a form and
at a frequency determined by the commission, that demonstrate ERCOT's current
performance in the areas of non-compliance.
(3)
The commission may require ERCOT to undergo an audit performed by an
appropriate independent third party.
PROJECT NO. 38338
(4)
PROPOSAL FOR PUBLICATION
PAGE 23 OF 30
The commission may assess administrative penalties under PURA Chapter 15,
Subchapter B.
(5)
The commission may suspend or revoke ERCOT's certification under PURA
§39.151(c) or deny a request for change in the terms associated with such
certification.
(6)
The imposition of one penalty under this section does not preclude the imposition
of other penalties as appropriate for the instance of non-compliance or related
instances of non-compliance.
(7)
In assessing penalties, the commission shall consider the following factors:
(A)
Any prior history of non-compliance;
(B)
Any efforts to comply with and to enforce the commission's rules;
(C)
The nature and degree of economic benefit or harm to any market
participant or electric customer;
(D)
The damages or potential damages resulting from the instance of noncompliance or related instances of non-compliance;
(E)
The likelihood that the penalty will deter future non-compliance; and
(F)
Such other factors deemed appropriate and material to the particular
circumstances of the instance of non-compliance or related instances of
non-compliance.
(8)
The commission may initiate a compliance proceeding or other enforcement
proceeding upon its own initiative or after a complaint has been filed with the
commission that alleges that the ERCOT has failed to comply with PURA, the
commission's substantive rules, or a commission order.
PROJECT NO. 38338
PROPOSAL FOR PUBLICATION
PAGE 24 OF 30
(6)(9) Nothing in this section shall preclude any form of civil relief that may be
available under federal or state law.
(j)
Priority of commission rules. This section supersedes any protocols or procedures
adopted by ERCOT that conflict with the provisions of this section. The adoption of this
section does not affect the validity of any rule or procedure adopted or any action taken
by ERCOT prior to the adoption of this section.
(k)
Long-term operations plan. Annually, by DecemberOctober 31st, ERCOT shall file
with the commission a long-term operations plan. The commission may initiate a review
of the plan, at its discretion. At a minimum, the long-term operations plan shall provide
the following information:
(1)
A description of ERCOT's roles and responsibilities within the electric market in
Texas, including system reliability, operation of energy and capacity market and
managing transmission congestion settlement of the wholesale market,
transmission planning and interconnection of new generating plants,centralized
control and power scheduling, centralized commercial functions and a description
of how ERCOT's roles and responsibilities relate to the roles and responsibilities
of the transmission and distribution utilities and retail electric providers and to the
North American Electric Reliability Corporation and Texas Reliability Entity;
(2)
(No change.)
(3)
A description of major capital projects completed in the current budget year and
those expected to be completed in the next budget year, including an explanation
PROJECT NO. 38338
PROPOSAL FOR PUBLICATION
PAGE 25 OF 30
of why each project is needed to assist ERCOT in meeting its responsibilities or
the benefits it would provide to market participants or consumers;
(4)-(5) (No change.)
(6)
An evaluation of ERCOT's performance in meeting its responsibilities and system
expectations, as set forth in PURA and this titlethe commission rules, during the
current budget year; and
(7)
(l)
(No change.)
Strategic plan. Annually, by December 31st, ERCOT shall file with the commission a
strategic plan. The plan shall include a statement of the mission and vision of the
organization, a summary of the industry environment in which it operates, a description
of the major challenges it faces, and the key strategies it intends to employ to perform its
functions and meet its challenges. The commission may initiate a review of the plan, at
its discretion.
PROJECT NO. 38338
PROPOSAL FOR PUBLICATION
PAGE 26 OF 30
§25.363. ERCOT Budget and Feesand Other Rates.
(a)
Scope. This section applies to the budget and all fees and rates levied or charged by the
Electric Reliability Council of Texas (ERCOT) in its role as an independent organization
under the Public Utility Regulatory Act (PURA) §39.151. Charges for wholesale market
services acquired by ERCOT in accordance with its protocols are not governed by this
section, but may be revised in accordance with §25.362 of this title (relating to Electric
Reliability Council of Texas (ERCOT) Governance).
(1)
(No change.)
(2)
ERCOT shall not implementmust seek and obtain commission approval of any
new or modified budget, rate or fee without commission approvalprior to
implementing the new or modified rate or fee.
(3)
ERCOT shall not incur expenses or capital outlays in any year that exceed the
amounts approved by the commission, except in the case of an emergency that
impairs its ability to conduct is functions.
(4)
ERCOT shall not incur debt or defer principal repayments of debt without
commission approval. ERCOT shall seek approval of any loan or agreement to
provide a line of credit from a bank or other institution, the issuance of bonds or
notes, any arrangements that would permit it to issue bonds or permit the issuance
of bonds on its behalf at a later date, and any draw on a line of credit. This
paragraph does not require approval of a contract to lease equipment or other
property used in normal operations.
(5)
ERCOT shall not hire employees, either by direct hiring or contract employment,
in excess of any staffing limit prescribed by the commission.
PROJECT NO. 38338
(b)
PROPOSAL FOR PUBLICATION
PAGE 27 OF 30
System of accounts and reporting. For the purpose of accounting and reporting to the
commission, ERCOT shall maintain its books and records in accordance with Generally
Accepted Accounting Principles. ERCOT shall establish a standard chart of accounts and
employ it consistently from year to year. The standard chart of accounts shall be used for
the purpose of reporting to the commission and shall be consistent with the fee-filing
application approved by the commission and the long-term operations plan.
The
accounts shall show all revenues resulting from the various fees charged by ERCOT and
reflect all expenses in a manner that allows the commission to determine the sources of
the costs incurred for each major activity conducted by ERCOTfor which a separate fee is
charged. ERCOT may not change its chart of accounts to be any less detailed than that
required in the fee-filing package without prior commission approval.
(c)
Allowable expenses for fees and rates. Expensed and capital outlays in the budgetFees
and rates shall be based upon ERCOT's expected cost of performing its required
functions as described in PURA §39.151(a) and this title. To determine the reasonable
cost of performing its functions, ERCOT shall use a historical test year, except that
ERCOT may use a future test year if ERCOT demonstrates that the scope of its activities
and functions has been expanded by the commission or the market participants, resulting
in higher future costs. To determine whetherif the costs are reasonable and necessary, the
commission may consider the budget justification provided by ERCOT, theshall review
ERCOT's costs for consistency compared to ERCOT long-term operations plan, to costs
incurred by market participants and other independent system operators for similar
PROJECT NO. 38338
PROPOSAL FOR PUBLICATION
PAGE 28 OF 30
activities, costs incurred in prior years, capital project identified in the budget, and to any
other information and data considered appropriate by the commission.
(1)
Only those expenses that are reasonable and necessary to carry out the functions
described in PURA §39.151and this title, shall be included in allowable expenses.
(2)-(3) (No change.)
(d)
Commission review and action.
The annual budget is subject to review by the
commission. ERCOT shall file with the commission its board-approved budget, budget
strategies, and staffing needs, with a justification for all expenses, capital outlays,
additional debt, and staffing requirements. The budget shall be filed not later than 90
days prior to the date that the budget is expected to be implemented.
(1)
The budget shall include categories of expenses, capital outlays, additional debt,
and staffing needs in at least the following level of detail:
(A)
Transmission
system
operation,
including
planning,
scheduling,
forecasting, and other transmission-related functions;
(B)
Retail market operations, including registration and switching of retail
customers, load profile administration, meter data management, and
related activities;
(C)
Operation and settlement of wholesale markets, including registering
market participants, accepting bids and determining prices, settlement and
billing, credit management, operating a market for congestion revenue
rights, and related activities;
PROJECT NO. 38338
(D)
PROPOSAL FOR PUBLICATION
PAGE 29 OF 30
Managing renewable energy credit trading, including registering and
accrediting facilities, determining credit obligations, issuing and retiring
credits, reporting, and related activities;
(E)
Customer care, including training and other customer-related activities;
(F)
Information technology activities; and
(G)
Support and management functions, including executive management,
strategic planning, administrative support, legal, finance, audit, human
resources, facilities management, project management, risk management,
and related activities.
(2)
Expenses, capital outlays, and staffing needs shall be directly assigned to the
categories listed in paragraph (1) of this subsection, to the extent that it is feasible
to do so. Allocations or estimates may be used, to the extent that it is not feasible
to directly assign expenses, capital outlays, and staffing needs.
(3)
The commission may approve, reject or modify the budget, budget strategies, and
staffing needs.
(4)
The commission may approve the recovery of the amount of an approved budget
though a fixed fee or fees or through a variable fee that is designed to recover the
approved budget amount.
(5)
The commission may adopt performance measures to assess ERCOT’s fiscal and
operating performance,
PROJECT NO. 38338
PROPOSAL FOR PUBLICATION
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This agency hereby certifies that the proposal has been reviewed by legal counsel and
found to be within the agency’s legal authority to adopt.
ISSUED IN AUSTIN, TEXAS ON THE 23rd DAY OF AUGUST 2010 BY THE
PUBLIC UTILITY COMMISSION OF TEXAS
ADRIANA A. GONZALES
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